1. For a 20-year period beginning in 1986, the NYSE was regularly criticized for making less use of electronic and computer technology than most of its competitors around the world, even less than exchanges in emerging and developing countries and than exchanges just starting business. The NYSE would argue that its specialist system required more “face-to-face” contact than other nonspecialist exchanges.

a. Why would the NYSE specialist system require more face-to-face contact than its competitors?

b. Assume that face-to-face contact hurt investors more through increased trading expenses and reduced trading efficiency than it helped them. That is, assume that the argument that you prepared for part

(a) is simply wrong. Why might the NYSE still resist adopting improved electronic and computer technology?